The impact of the Canterbury earthquakes on household income and expenditure in the Canterbury region in New Zealand

Abstract. Using New Zealand's Integrated Data Infrastructure (IDI), we evaluate the impact of the 2010–2011 Canterbury earthquakes on household economic behaviour, focusing on changes in income and expenditure. Using nationally representative data from the Household Economic Survey (HES) linked to measures of earthquake intensity, we implement a difference-in-differences design comparing pre- and post-earthquake outcomes for earthquake-affected households with a matched comparison group. We find that, relative to matched comparison households, total household income in high-intensity areas increases by about NZD 7,600 in the post-earthquake period. Total expenditure shows no clear average DiD effect, but expenditure composition shifts markedly: receipts and refunds, which capture insurance reimbursements and related inflows, more than double, and diary-recorded day-to-day spending rises by about 14 %. Spending also increases in transportation, travel, fees and subscriptions, and social insurance contributions. Additional analysis shows that households that relocated out of Canterbury faced substantially higher housing costs (around NZD 25,000) and lower mortgage and loan repayments (around NZD 9,500) than households that remained, while average incomes are similar across the two groups. These findings provide evidence on household economic adjustment to disasters and offer policy-relevant insights into post-disaster financial support, social security design, and the management of population movements.